Simon Babes moved to Shanghai in August 2004, enjoying a career break from London Underground and accompanying his wife who was posted here with Unilever. Some three years later we met in the offices at Metro Plaza, Hongqiao, of Colin Buchanan China Ltd., of which Simon is the General Manager and significant shareholder.
Simon Babes
Here on arrival in Shanghai, Simon started working from home as a part-time consultant for London Underground. By January 2005 this role had expanded to that of sub-consultant for Colin Buchanan Ltd., one of the UK¡¯s leading transport planning consulting firms. This involvement came about as Colin Buchanan had been retained to review the Shanghai Transport White Paper which had been drafted by them for the Shanghai Government in 2001. Following this co-operation, both parties started to assess the viability of establishing a China office for Colin Buchanan, which would provide both transport consultancy services to the China market and, a centre for outsourcing some aspects of project work undertaken within the UK.
By October 2005 a business plan had been presented to Colin Buchanan¡¯s UK board and the process of establishing operations here formally started. Commenting on this process Simon recalled some issues which contributed to a relatively smooth establishment process. Key among these was establishing an offshore holding company to own the company incorporated in China, for which they used a Hong Kong entity and secondly, designating Simon as the Legal Representative of the China Operation and sole shareholder, which significantly streamlined much of the paper work and application process for establishing the China registered company.
Early on it was established that, as a company who wished to sell their services into the China market, Colin Buchanan would have to operate under a wholly owned foreign enterprise (WOFE) structure. Essentially a Limited company domiciled within China and governed by Chinese law. Having talked with a number of professional services companies regarding the cost of establishing this it became clear there is still a huge range of costs being charged by such companies for a very similar service. He opted for the best value for money route, which involved the serviced office operator Asianbiz Centre (www.asianbizcenter.com) providing both his first office and, the professional services associated with establishing the China WOFE.
Use of a serviced office in the early stages of the company¡¯s establishment in Shanghai, was another important factor in maintaining tight control over finances. Shanghai serviced offices function much as a hotel room might, by providing a fully furnished and serviced (secretarial, IT support etc) office suite, with centrally located meeting rooms and coffee lounge with shared facilities such as faxes and printers. Over the first 2 years of the company¡¯s operations, head count has grown from 1 to 22 persons and, the use of a serviced office to expand in a flexible manner as more space was required, was an important means of managing this growth.
Hiring of the team is another key challenge for any company establishing operations here. Simon adopted a number of different approaches for this. One of his key personnel who combined the role of office manager and business development manager came from a job advert posted on the British Chamber of Commerce website (
http://www.britcham.org/).
Team Buchanan
As the team expanded Colin Buchanan has used a range of innovative approaches to hiring staff, including a link-up with Tongji University, where they offer final year Masters students the opportunity to join a secondment programme at the company, offering both parties the chance to work together and assess suitability. Interestingly, for the majority of their staff, these have come through industry contacts and referrals rather than job agencies.
Development of the business in China since 2005 has been a varied and interesting challenge. At the heart of this process has been the belief that Colin Buchanan is able to bring knowledge, skills and experience from its UK operations, which add significant value to many of the transport projects being undertaken in China. This might involve Colin Buchanan working as a sub-contractor for a government owned Design Institute, which has been mandated to manage the development and design of a transport infrastructure project.
Honqiao airport scheme
An example of this type of co-operation is with the East China Architectural and Design Institute, who Colin Buchan China Ltd. are working with on the huge new Hongqiao Airport redevelopment plan. The scope of this work includes the design of infrastructure associated with the new metro stations, high speed rail station, bus stations, coach stations, car parks and taxi ranks in and around an expanded airport footprint. Key to developing this type of working relationship has been the ability to develop relationships with these Design Institutes, not on a gifts and dinner basis, but through a more pro-active exchange of information, which has included selecting and investigating problems associated with expanded transport plans and presenting
these to partners, as a method of initiating discussion and policy development. Other projects of this type include simulation modeling of pedestrians in four Beijing metro stations, where the city government is currently implementing automatic fare collection systems to replace the current paper ticket based system.
Commenting on some of the main challenges he has faced since starting the business in China, Simon stresses the need to be proactive in suggesting and solving problems as a way to build meaningful relationships with future partners and the need for perseverance and patience to allow relationships to develop. Don¡¯t just expect to be on or at the top of the tender list because of your technical ability or reputation. Interestingly, it was also discovered that, the balance of business may turn out to be quite different from initial expectations. For Colin Buchanan China this has meant a larger opportunity in providing technical processing and support in China, for projects undertaken in the UK and Europe.
Underneath the energy and vibrancy of Shanghai¡¯s business environment, the slow burn of developing meaningful contractual relationships based around a strong technical team (no one has yet left the company) and demonstration of actual skills, has been at the heart of the company¡¯s expansion into the China market.
Belfrey Partners has continued to provide support to Colin Buchanan since 2005, initially securing office space in Asian Business Centre¡¯s Pudong serviced office and, most recently, securing a 250m² office in Metro Plaza, 555 Loushanguan Road.
If you would like to contact Simon Babes please do so via the Colin Buchanan China Ltd website at:
http://www.cbuchanan.co.uk/contact/contact.asp?id=17
Author: Jerome H Vaughan
Belfrey Partners
